Late week rally not enough

Wheat struggled for the first part of last week before staging a strong recovery. Early selling was tied to weak demand and improving weather forecasts for the Northern Plains. Gains for the week ending April 19 came from weather concerns, as another cold wave moved into the Southern Plains. For the week ending April 25, July Minneapolis gained 2 cents, July Chicago dropped 7.75 cents and July Kansas City picked up 11 cents.

Wheat started the week off under pressure and remained under pressure through April 24. The winter wheat contracts were the worst performers, trading with double-digit losses at one point during the week. Minneapolis was the best performer, as traders continue to show concerns about planting progress. The winter wheat exchanges were under pressure, as traders removed some of the potential freeze weather premium. Weekend weather did not get as cold as expected and that resulted in traders needing to take freeze damage premium out of the market. Additional selling was tied to spillover selling from a lower corn market. A stronger U.S. dollar also added pressure during the week.

The April 24 session was influenced by a negative Statistics Canada acreage report. Statistics Canada is expecting Canadian producers to plant more wheat in 2013. In its expected planted acreage report, Statistics Canada put Canada’s wheat acreage at 19.4 million, an increase of more than 14 percent. Late in the session, Kansas City saw a recovery from weather forecasts that are calling for a hard freeze for parts of Kansas, Oklahoma and Texas.

Wheat started the April 23 session off steady to slightly higher, following the trend set by the other grains. The U.S. Department of Agriculture’s export sales report was not friendly to any of the grains and that pressured grains early. Wheat’s biggest supporting factor was from freeze damage concerns. Temps the night of April 24 dropped down to the teens for much of the Southern Plains. Estimates have about 50 percent of the wheat in the Southern Plains far enough along in crop development that temperatures at this level and for the amount of time would result in damage.

USDA’s export inspections for wheat were estimated at 24.8 million bushels for the week ending April 19. Wheat export sales pace for the week ending April 19 was estimated at a combined total of 11.2 million bushels, with 2.6 million old crop and 8.6 million new crop. With seven weeks left in the marketing year, shipments need to average 22.1 million bushels and sales need to average 8.3 million to make USDA’s expectations of 1.025 billion.

As of April 21, 7 percent of the nation’s spring wheat crop was planted, compared with 6 percent the previous week, 52 percent for last year and 24 percent for the five-year average. North Dakota and Minnesota reported no progress. Eight percent of the nation’s winter wheat was headed, compared with 4 percent the previous week, 42 percent for last year and 19 percent for the five-year average. USDA estimated the nation’s winter wheat crop condition rating at 35 percent good to excellent, 32 percent fair and 33 percent poor to very poor, down 1 percent from the previous week. This compares with 63 percent good to excellent for last year. Oklahoma’s crop condition rating improved 2 percent to 27 percent good to excellent, 37 percent fair and 36 percent poor to very poor. Texas’ crop condition rating dropped 5 percent to 12 percent good to excellent, 28 percent fair and 60 percent poor to very poor. Kansas’ crop condition rating was unchanged at 30 percent good to excellent, 33 percent fair and 37 percent poor to very poor.

Corn: Demand and weather

Corn traded lower to start last week, but replaced those red numbers with green to end the week. Early week pressure came from a drier and warmer forecast into this week and that would put planters back into the field. Export sales also have been disappointing. Buying interest resurfaced later in the week, with fresh export sales and another rain event expected. For the week ending April 25, July lost 8 cents and December was down 21 cents.

Corn traded under pressure the first two days of the week. Pressure was from the weather forecast calling for higher temperatures and expectations that planting will be in full swing. Soil moisture conditions also have improved in much of the Corn Belt, with many locations no longer registering drought conditions. Stocks have been increased in the latest USDA reports and export sales remain slow.

The market rebounded later in the week because of a supportive planting progress report and a wetter forecast. The report stated only 4 percent of the corn is planted, versus 26 percent last year and a five-year average of 16 percent. The report also showed that Indiana, Illinois and Ohio only have 1 percent of their crop in the ground. The forecast also put more rain in the seven- to 10-day timeframe, with 1 to 2 inches predicted in the Eastern U.S. The export sales report was also above USDA’s estimate, with fresh new crop sales being announced April 25 (China bought 300,000 metric tons and another 240,000 metric tons to an unknown destination).

Ethanol production for the week ending April 19 averaged 853,000 barrels per day, which is up 2.5 percent from the previous week and down 1.4 percent from last year. Corn used in production the week ending April 19 is estimated at 89.6 million bushels and needs to average 90.91 million per week to meet this crop year’s USDA estimate of 4.55 billion bushels. Stocks were 17.59 million barrels, which is up 0.5 percent from the previous week and down 19.5 percent from last year.

USDA’s export inspections report was bearish for corn, as there were 12.4 million bushels shipped. Shipments needed each week to hit the USDA export estimate are 17.1 million bushels. The export sales report for corn was at 15.8 million bushels, above the 8.7 million needed to meet USDA’s projection of 800 million. Total shipments last week were at 11.9 million bushels, below the 16.5 million needed for the 2012 to ’13 marketing year.

Soybeans: Weather impacts planting

Soybeans started last week off on a bad note with three of the first four session trading with losses. A slowdown in demand and reports that South America is considering gearing up to have ports operating 24 hours a day added to the pressure on soybeans. For the week ending April 25, July soybeans were down 10.25 cents, while November was 6.75 cents lower.

Soybeans closed with sharp losses and near the day’s low on April 22 amid overall commodity selling. The firm basis continues to provide support, but concern about Chinese demand combined with an expected rebound in global supply late in the summer weighs heavily on the market. USDA announced sales of 174,000 metric tons of soybeans to China for 2013 and 2014 delivery April 26. April 22 export inspections were bearish, coming in below market expectations and below the amount needed to keep pace with USDA’s projection.

April 23 and 24 also traded lower on weather and planting concerns. Wet conditions have led to delays in corn planting and a likely shift of acreage to soybeans. But forecasts show better planting weather for soybeans in the near future. Poor economic data out of China and the European Union pressured the market, as did continued concerns over bird flu in China. USDA announced a sale of 392,000 metric tons of soybeans to China for 2013 and 2014 delivery April 23 and a sale of 116,000 metric tons to undisclosed destinations on April 24.

Soybeans traded sharply higher April 25, with spillover support from strong gains in Kansas City wheat contracts. Further support came from news from China that researchers have found no evidence of bird flu spreading person-to-person. New crop soybeans are further supported by Chinese buying to bolster their reserves.

USDA reported soybean export inspections pace for the week ending April 19 at 4.97 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.237 billion bushels, compared with 1.074 billion for last year at this time. Soybean export sales pace for the week ending April 19 was estimated at 15.5 million bushels (-7.6 million for 2012 and 2013), bringing this year’s total to 1.339 billion, compared with 1.228 billion last year at this time. Shipments were reported at 7 million bushels.

As of April 21, 23 percent of the nation’s barley was planted, compared with 18 percent the previous week and 24 percent for the five-year average.

Statistics Canada is estimating barley acres to drop 2.2 percent this year to 7.2 million. April 25 cash feed barley bids in Minneapolis were at $4.95 per bushel, while malting barley bids were at $6.70.

Statistics Canada is estimating Canada producers will increase durum acres 9 percent from last year, putting seeded acreage at 5.1 million. This marks the third straight yearly increase for durum acres in Canada.

April 25 cash bids for milling durum were $8 per bushel in Berthold, N.D., and Dickinson, N.D., bids were at $7.90.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending April 25 with $5 (Canadian) losses. Canola traded on the defense most of the week, following the other vegetable oil markets. Losses were limited by planting delay concerns, as many traders are thinking canola acreage will decline because of the late spring. Losses also were limited by a friendly Statistics Canada acreage report. Statistics Canada is expecting canola acres in Canada to drop 11 percent this year to 19.1 million acres. If realized, this will be the first decrease in canola acres in Canada since 2006.

April 25 cash canola bids in Velva, N.D., were at $27.35 per hundredweight.

Sunflowers

USDA estimated soybean oil export sales pace for the week ending April 19 at 1.7 trillion metric tons. This brings the year-to-date export sales pace for soybean oil to 830.7 trillion metric tons, compared with 358 trillion metric tons for last year at this time.

April 25 cash sunflower bids in Fargo, N.D., were at $22.60 per hundredweight.